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    Cost accounting

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    7 views5 pages

    Cost Accounting Excel

    Uploaded by

    Abdul Majid
    Cost accounting

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 5

    A.

    By allocating the manufacturing overhead based on direct labor hours, calculate the

    Direct material (15,000* AED 6/unit + 25,000* 8/unit) AED 790,000


    Direct labor AED 600,000
    Manufacturing Overhead AED 720,000
    Total Manufacturing budgeted cost AED 2,110,000

    2- Cost per unit for Crystal product

    Direct Material AED 6


    Direct labor (AED 600,000/120,000) * 3hours/unit AED 15
    Manufacturing OH (AED 720,000/120,000 * 3hours/unit AED 18
    Cost per unit for Crystal Product AED 39

    3- Cost per unit for Class product

    Direct Material AED 08


    Direct labor (AED 600,000/120,000) * 4hours/unit AED 20
    Manufacturing OH (AED 720,000/120,000)* 4hours/unit AED 24
    Cost per unit for Crystal Product AED 52

    B. After separation of manufacturing overhead into activity pools, compute the total manufacturing

    Inspection Fabricating Assembly Inspection Fabricating


    30% 40% 30%
    Direct Labor Direct Labor
    *790,000 *790,000 *790,000 237,000 316,000
    Direct 35% 35% 30% Direct
    Material *600,000 *600,000 *600,000 Material 210,000 210,000
    Manufacturin 20% 50% 30% Manufacturin
    g overhead *720,000 *720,000 *720,000 g overhead 144,000 360,000

    C. Using ABC system, calculate the cost per unit for:

    For Crystal Product:

    Direct Material AED 06


    Direct labor (AED 600,000/120,000 * 3hours/unit AED 15
    Manufacturing OH:
    Inspection [( AED 7.2* 8,000)/15,000 Units] AED 3.85
    Fabricating [( AED 0.4* 10 *15,000)/15,000 units] AED 04
    Assembly [( AED 19.75* 4,000/15,000 units] AED 5.27
    AED 13.12
    Cost per unit for Crystal Product AED 34.12

    For Glass Product:

    Direct Material AED 08


    Direct labor (AED 600,000/120,000 * 4hours/unit AED 20
    Manufacturing OH:
    Inspection [( AED 7.2* 12,000)/25,000 units] AED 3.46
    Fabricating [( AED 0.4*30* 25,000)/25000 units] AED 12.0
    Assembly [( AED 19.75* 12,000)/25,000 units] AED 9.48
    AED 24.94
    Cost per unit for Glass Product AED 52.94

    Workings: Manufacturing OH Activity Base


    (a) (b)
    Inspection AED 144,000 AED 12,000 + 8,000=20,000
    Fabricating AED 360,000 AED 10*15,000 + 30*25,000=900,000
    Assembly AED 316,000 AED 4,000 + 12,000=16,000

    D. Discuss how a decision by Nasir Manufacturing regarding the continued production of Crystal wi

    Answer - If Crystal is continued to be produced, it will cost AED - 4.88 (AED 34.12 - AED 39.00) per unit lesser than expected.

    E. If Nasir decides to moves to mass production and focuses on one product (Glass) by using proces

    Answer - 1) Analyze the flow of actual units.

    2) Convert the material inventory to find out the equivalent units.

    3) Identify the total costs.

    4) Calculate the average cost per equivalent unit using weighted average method.

    5) Allocate these costs to finished units and Work in Process units by multiplying units by average cost per equivalent unit calc
    r hours, calculate the:

    the total manufacturing budgeted cost of the:

    Assembly Total

    237,000 790,000

    180,000 600,000

    216,000 720,000
    Manufacturing OH Per activity Base
    [a/b]
    000=20,000 AED 144,000/20,000 = AED 7.2
    + 30*25,000=900,000 AED 360,000/900,000 =AED 0.4
    000=16,000 AED 316,000/16,000 = AED 19.75

    production of Crystal will be affected by the results of your calculations in requirement C.

    er unit lesser than expected.

    t (Glass) by using process costing system in highly automated process. Identify the five steps required of the

    e cost per equivalent unit calculated in 4th step.


    e steps required of the production the cost report if Nasir uses weighted average method.

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